It's funny how everyone keeps saying there is no growth left in our core business. Yet look at Veritas as a company, and we've grown 25 percent over the last two years. We've gone from the end of 2000 at under $1.2bn in revenue to finishing 2002 at $1.5bn. Growth is a relative thing. We're not growing at the 50 to 60 percent clip we might have been at the heyday of the dot-com bubble, but we are still growing, and we are still successfully building our business out. You've talked about working with Cisco Systems and about bringing more of the management of storage into the networking arena. What's happening there?
We continue to work with Cisco, which has yet to bring to market a product that we are part of. They did introduce some storage capability in their switch technology, but the one that starts doing virtualisation in the switch has not yet come to market. Our foray into that market with Cisco will be highly dependent on how well Cisco does. It's much more in their hands than it is in mine. We're also embedding our technology in lots of different network-based switches. As storage and networks converge, we want to be there. Ultimately, I believe that customers will want to provision storage from the server and that they are going to want to provision some of their storage from the network. It's going to be relatively application dependent and relatively company dependent. One of your competitors, Legato Systems, is said to be on the block now. Is that a company whose technology you'd rather see in your hands or in the hands of your competitors?
The technology that Legato has, along with its market share position, is largely irrelevant. On a relevance basis, if you look at its market share, it's a small player in the market today...The fact that it's rumoured to be for sale shouldn't be a surprise...Veritas is pretty big, and we're not for sale. IBM is not interested in selling its business -- at least I have not heard that they are. And Computer Associates is not a company that somebody would buy just for backup. It has too broad of a business. (Legato) is the first one that is small and available in a market that already has three heavyweights. If it does get acquired, I don't think it will change its relevance in the market. One issue that has come up with all technology companies is the question of expensing options. If Veritas had had to do that last year, it would have resulted in a loss. There's a proposal from shareholders who want you to expense options.
We have a recommendation by our board to vote against the shareholder recommendation. There are really two reasons that recommendation is there. One is that accounting rules don't stipulate a consistent way for everyone to report the expensing of stock options. But on the particular proposal put in front of our shareholders, the real difficulty is that (shareholders) are asking us to expense options only for our executives. From what we can tell, there is no emerging rule or scenario under which anybody is asking a company to simply expense options for some subset of the options that are given. All of the proposed (accounting) rules are all or nothing. I'm relatively indifferent to it. If the accounting rules say we have to expense options, and they give us a consistent way to expense options such that my competitors expense them that way, and the industry expenses them that way, and all forms of business expense them that way -- then we're going to expense them. I do have the concerns of a chief executive, wondering whether the valuation to options would be accurate. That's the big question. I also fear that that information will hopelessly confuse shareholders. It would be inaccurate, in my view, to see Veritas last year as a company that lost money. In fact, if you look at Veritas last year, we generated roughly $100m-plus in cash every quarter. I just think that the rules are way too confusing.
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